Honeywell Aerospace Announces Expansion of Indian Operations to Boost Manufacturing Base

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Researched by Industrial Info Resources (Sugar Land, Texas)--Honeywell Aerospace, a business sector of Honeywell International (NYSE:HON) (Morris Township, New Jersey), is planning to expand its operations in India. The global provider of integrated avionics, engines, systems and service solutions for aircraft manufacturers currently has design and development centers in India in Bangalore and Hyderabad. The company intends to ramp up its personnel in the country to 6,000 over the next three to four years at its present locations. This will be a 20% increase from the present headcount. This move is designed to give the company a competitive edge among the developing economies.

Honeywell has provided integrated defense solutions and allied technologies for powering military equipment, ranging from avionics for jet fighters to systems that power unmanned vehicles. The company is looking to move some of these operations for the defense space from the U.S. to India. Future expansions within the company in the defense and space industry space are expected to move to India. Honeywell plans to recruit about 1,000 engineers for research and development work at its existing locations in this space in India.

TPE331, Honeywell's first turboprop engine, was conceptualized and designed in 1959 for the military. With the current turboprop fleet comprising more than 12,700 engines, India remains the only manufacturing location for these engines. Hindustan Aeronautics Limited (Bangalore, Karnataka), one of Asia's largest aerospace companies, has the license to produce the turboprop engines.

Honeywell is eyeing a share in the Indian air force's multibillion-dollar order involving Jaguar fighters. The project to re-engineer about 275 F125 engines that propel the Jaguar fighter is yet to be awarded to a vendor. With India increasing its spending in defense, the company sees a tremendous potential for growth in the military space in the country. With the global civil aviation business estimated to be at $5.6 billion in 2008, India has a 12% share in the worldwide business jets market. The demand for business and private jets is expected to grow at 50% annually for the next few years. However, with the global economic slowdown, the estimated growth might not be as aggressive as projected.

Honeywell reportedly outsources nearly 10%-15% of its total manufacturing operations. It has a significant presence in China for commercial aviation with four leading industry joint venture companies catering to its domestic and international aviation market. Operations in China include maintenance, servicing and overhauling of aircraft brakes and wheels, design, development, production and selling of commercial aircraft systems and parts. The company also plans to set up a manufacturing facility in India to produce a suite of navigational radio systems, provided the current norms are changed. The current FDI regulations of the Indian government do not permit Honeywell to own a majority stake in any joint venture.

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